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1 Judge Says Elon Musk's Claims of Harm from OpenAI Are A 'stretch'.

OAKLAND, Calif. (AP) - Elon Musk's attorneys took on with OpenAI in court Tuesday as a federal judge weighed the billionaire's request for a court order that would block the ChatGPT maker from transforming itself to a for-profit company.

U.S. District Judge Yvonne Gonzalez Rogers said it was a "stretch" for Musk to claim he will be irreparably damaged if she doesn't step in to stop OpenAI from moving on with its transition from a research lab to a for-profit corporation.

But the judge likewise raised concerns about OpenAI and its relationship with company partner Microsoft and said she wouldn't stop the case from relocating to trial as soon as next year so a jury can choose.

"It is plausible that what Mr. Musk is saying is real. We ´ ll learn. He ´ ll sit on the stand," she said.

Musk, an early OpenAI financier and board member, took legal action against the artificial intelligence company last year, first in a California state court and later in federal court, alleging it had betrayed its starting aims as a nonprofit research study laboratory benefiting the general public great. Musk had actually invested about $45 million in the startup from its founding until 2018, his lawyer said Tuesday.

Musk intensified the legal conflict late last year, including new claims and accuseds and asking for a court order that would stop OpenAI ´ s prepares to convert itself into a for-profit business more fully. Musk also added his own AI business, xAI, as a plaintiff.

Also targeted by Musk's claim is OpenAI's close service partner Microsoft and tech business owner Reid Hoffman, a previous OpenAI board member who likewise rests on Microsoft's board.

Gonzalez Rogers said she has a high bar for approving the kind of preliminary injunction that Musk desires however hasn't yet ruled on the request. She did say she had "significant concerns" with 2 people connected to Microsoft on OpenAI's board - Hoffman and long time Microsoft executive Deanna Templeton, who was a "non-voting observer."

"So you want me to believe that she was sitting there listening to all the discussions and not informing anybody? What would the point be for her to sit there and listen to everybody, if not to communicate what she was listening? There would be no point for her to be there, which is why she in fact ought to not exist," she said.

Hoffman, a co-founder of LinkedIn, has been on Microsoft ´ s board considering that shortly after the tech giant purchased the task networking website. He stepped down from OpenAI's board in 2023 to avoid disputes with his AI start-up, Inflection.

Templeton, who Musk also called as an accused, was included as a non-voting member of OpenAI ´ s board in the after-effects of Altman ´ s ouster after Microsoft CEO Satya Nadella looked for more stability on the board. But months later, she was dropped from the OpenAI board as U.S. antitrust enforcers were expressing issues about such plans on corporate boards.

The judge has actually handled a variety of tech market cases including Apple's battle with Epic Games, though she said Tuesday that Musk's case is "absolutely nothing like" that a person. That case was also the last time she approved a preliminary injunction, in 2020, eight months before the case went to trial.

Then-President Barack Obama designated Gonzalez Rogers to the federal bench in 2011.

Tuesday's hearing was originally set for January but was postponed after Musk's attorney Marc Toberoff said his house was destroyed in the Pacific Palisades wildfire.

Musk, who did not go to the hearing, has actually alleged in the claim that the companies are breaking the regards to his fundamental contributions to the charity. Judge Gonzalez Rogers called it a "stretch" to claim "permanent harm" to Musk, and called the case "billionaires vs. billionaires." She questioned why Musk invested 10s of millions in OpenAI without a composed agreement. Toberoff said it was because the relationship in between Altman and Musk at the time was "built on trust" and the 2 were very close.

"That is simply a lot of cash" to invest "on a handshake," the judge said.

OpenAI has actually said Musk ´ s asked for court order would "debilitate OpenAI ´ s organization"and objective to the benefit of Musk and wiki.rrtn.org his own AI business and is based upon "improbable" legal claims.

At the heart of the disagreement is a 2017 internal power struggle at the recently established startup that led to Altman becoming OpenAI ´ s CEO

. Emails revealed by OpenAI reveal Musk had also sought to be CEO and grew disappointed after 2 other OpenAI co-founders said he would hold too much power as a major investor and president if the start-up was successful in its goal to attain better-than-human AI referred to as synthetic general intelligence, or AGI. Musk has actually long voiced concerns about how sophisticated types of AI could threaten humankind.

Altman eventually was successful in becoming CEO and has actually remained so except for a duration in 2023 when he was fired and after that reinstated days later on after the board that ousted him was replaced.

OpenAI has actually looked for to show Musk ´ s early assistance for the idea of making OpenAI a for-profit service so it could raise money for the hardware and computer system power that AI requires.

Musk is not the only one challenging OpenAI's for-profit shift. Facebook and Instagram parent Meta Platforms has asked California's attorney general to obstruct it, and the office of Delaware's chief law officer has said it is examining the conversion.

It was unclear Tuesday when the case may go to trial. Musk's legal representatives at first said they would be ready by June after some back-and-forth with the 2 sides the judge suggested it probably won't be until June 2026 at the earliest, however likely early 2027.

O'Brien reported from Providence, Rhode Island.

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